Gold’s Big Comeback: Take a Trip Back to the 1970s
Why has the gold price climbed so fast lately? If you’ve been watching the market, you’d think it’s a shock – but the truth is it’s just following old-school logic. Real interest rates and the prospect of shiny new rates have been rooting the price down for a while. When the Fed paused the hike, the price bounced back, just like it did in the late ’70s.
1979‑80: The Golden Roller‑Coaster
- August ’79 – Gold at $315/oz, real rates were a negative -0.438%.
- October ’79 – Gold juiced up to $382/oz as real rates swung to 3.428%.
- January ’80 – Gold hit a new high of $653/oz when rates slid back to 0.091%.
Fast‑forward to the early 80s: the gold rally didn’t fold until real rates hit a solid 4%, a surprisingly quick finish compared to our modern analog.
Why the Current Bull Run Matters
Here’s the scoop:
- Federal Reserve rolled out new tax deductions that left more cash in holders’ pockets. This is a clean fuel for the price pump.
- Geopolitical drama is heating up, adding extra volatility that gold loves.
- The Fed’s slow balance‑sheet shrinkage faded out, now sitting near its highest point since April 2022.
Bullish Upside
Our research flags $2,000/oz as the firm anchor for gold. If speculation kicks in, the price could strap up to $3,000/oz, and the outlier scenario? Potentially $4,500/oz.
Quick Take
Gold’s resurgence is no magic act – it’s a classic reaction to monetary policy shifts, geopolitical tremors, and fiscal relief. Keep your eyes peeled: the market’s still riding the wave.
